Defense contractor Raytheon Co. and two of its former top executives have settled improper accounting charges brought by the Securities and Exchange Commission.
Under the terms of the settlement, Raytheon will pay a $12 million penalty, plus a single dollar in disgorgements costs, without admitting, or denying the SEC's allegations of improper disclosure and accounting practices at its civil aircraft division from 1997 to 2001.
Former chairman and chief executive officer Daniel Burnham, and former deputy chief financial officer and controller of Raytheon Aircraft Co., Aldo Servello, also settled without admitting or denying the allegations. Burnham and Servello will pay disgorgement and penalties of about $1.2 million and $34,000, respectively.
SEC investigators had examined how Raytheon booked revenue from 1997 to 2001 from the sale of business jets built by the Raytheon Aircraft Co. division.
"At the core of Raytheon's improper accounting and disclosures was the all too common practice of prematurely recognizing revenue or delaying significant losses in hopes of eventually turning a business segment around," said Linda Chatman Thomsen, the SEC's director of enforcement, in a statement.
Previously on WebCPA:
Ex-Raytheon CEO to Settle Accounting Inquiry (March 28, 2006)
Raytheon Puts CFO on Leave, Makes Settlement Offers (April 18, 2005)
PwC Pays $50M to Settle Raytheon Lawsuit (May 27, 2004)
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This story has been corrected since it was originally published.
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